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TMI Blog1982 (6) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... gs u/s 17(1)(b) of the WT Act were not validly initiated. The facts bearing on this controversy are in a narrow compass and may be noted. The assessee is a co-owner, with her grandson, of the premises NO. 6B, Penn Road, Calcutta. The said property consists of land measuring approximately 61.19 Cottahs, with building constructed thereon on 13. 82 cottahs. The unbuilt area, thus, is 47. 37 cottahs. The building in question was purchased by the co-owners for a sum of Rs.5,60,000 on 18th March, 1971. The valuation dates under consideration are 31st March 1973, 31st March, 1974, 31st March, 1975 and 31st March, 1976 respectively. The assessee filed original returns of wealth declaring the value of her 1/2 share in the said property at Rs. 2,81,720 in respect of asst. yrs. 1973-74 and, 1974-75, at Rs. 4,20,000 for the valuation dt. 31st March, 1975 and Rs. 2,81,720 for the valuation dt. 31st March, 1976. In respect of the asst. yr. 1976-77, the assessee made a claim that the value of the aforesaid property had to be pegged down to that obtaining on 31st March, 1971 in terms of sub-s. (4) of s. 7 of the WT Act, 1957. 3. It appears from the orders of assessment filed before us in the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing the assessee, received on 23rd March, 1978 a letter dt. 15th Dec., 1977 from the ITO, M Ward, Comp. Distt. II, Calcutta, forwarding therewith the copy of a valuation report dt. 3rd Dec., 1976 proposed by the Valuation Officer, Unit No. III, Calcutta, in respect of 6B, Penn Road, Calcutta, according to which the value of the said building as on 18th March, 1971 came to be Rs.14,86,500, the respective values of the half shares of Smt. Jai Devi Kothari and Sri A. K. Kothari, being Rs. 7,79,000 and Rs. 7,04,145 respectively. Along with the letter of the ITO, M Ward, referred to above, a letter of the Valuation Officer dt. 10th Oct., 1977 had also been enclosed containing a tentative valuation report of the property as on 31st March, 1976. The final valuation report of the VO, in respect of the property referred to above, was sent to the WTO, having jurisdiction over the assessee by the ITO, M Ward, Comp. Dist II, Calcutta, along with a letter dt. 16th March, 1978. The said final report indicated that the value of the property as on 31st March, 1971 came to be Rs. 18,63,400. (b) Being armed with above details furnished to him by ITO, M Ward, Comp. Dist II, Calcutta, the WTO exa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsideration was not justified. After referring to the decisions in the case of CIT, Madras vs. T.R. Rajakumari (1974) 96 ITR 78 (Mad) and CIT, Patiala vs. Narinder Nath Parveen Chand (1975) 101 ITR 7 (P H) the ld. AAC gave the finding that "in my opinion, the WTO was not justified in issuing notice u/s 17 which was based on a mere change of opinion". Reference was also made by the ld. AAC to the decision in the case of The Indian and Eastern Newspapers Society vs. CIT New Delhi (1979) 12 CTR (SC) 190 : (1979) 119 ITR 996 (SC). 7. (a) The department is aggrieved of the aforesaid finding of the ld. AAC and, hence, appeal Nos. WTA 403 to 406 (Cal) 1981 have been filed by it. The contentions of the ld. Deptl. Rep. were short and simple. According to him, the information received by the WTO with regard to the valuation of the property, in which the assessee had 1/2 share, from the DVO constituted "information", received from an external source, after the completion of the original assessments, and inasmuch as he believed the said reports to be true, he had reasons to believe that the assessee's wealth had escaped assessments in terms of cl. (b) of sub-s (1) of s. 17, and therefore, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the WT Act, 1957 could be taken, the ld. Deptl. Rep. relied upon the following authorities: (i) Sakarlal Balalbhai vs. ITO (1975) 100 ITR 97 (Guj); (ii) Ganga Properties vs. ITO (1979) 118 ITR 447 (Cal). (C) In the first case, their Lordships of the Gujarat High Court had expressed the opinion that the report of the valuer, for purposes of wealth-tax assessment, of the cost of land and building would constitute information for purposes of s. 147 (b). It was pointed out by their Lordships in that case that though the valuation report was drawn up by the Executive Engineer belonging to the valuation cell of the income-tax department it was not an internal source in the sense of the materials being on record to which the ITO had opportunity to apply his mind at the time of making the original assessment. The action of the ITO in terms of cl. (b) of s. 147 on receipt of information contained in the report of the valuer was in the circumstances sustained by their Lordships of the Hon'ble Gujarat High Court in the aforesaid case. (d) In the case cited at sl. No. (ii) above, their Lordships of the Hon'ble Calcutta High Court had made the following observations with referen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... maintains vigilance through numerous sources and gets information from such source. Anonymous petition is one such potent source of information and the administration is obviously benefited by such information when they are verifiable by enquiry or investigation or research into facts as contained therein................." The contention of the ld. Deptl. Rep. on the basis of the above views of the Hon'ble Calcutta High Court, was that when the information contained in an anonymous petition could form the basis of action u/s 147(b), there was no reason as to why the information contained in the District Valuation Officer's report could not constitute the basis for reopening assessment u/s 17 (b) of the WT Act, 1957. In the case of S.B. (House Land) Pvt. Ltd. (1979) 119 ITR 785 (Cal) a note received from the IAC with regard to the facts of the case was treated by the Hon'ble Calcutta High Court to be a valid information for the purpose of action u/cl (b) of s. 147. In view of this, there was no justification for the ld. AAC to hold that the reopening of the assessments in the present cases were unjustified. The ld. D.R. also drew our attention to the observations of their Lordsh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d; what has merely changed is the opinion based on the same material. This change in the opinion has come about because the District Valuation Officer expressed a different opinion from that of the WTO. The assessee's valuer had also given his valuation report which estimates the value of the property at a substantially lesser amount. The opinions of the experts may thus go on changing from time to time. But on account of such frequent changes of the opinions of the valuers, the assessments of an assessee could not be reopened time and again. There must be some finality as to the assessments and the WTO cannot be allowed to go on revising his opinion in this manner. He drew our attention to the decision of the Hon'ble Bombay High Court in the case of Tulsidas Kilachand vs. D.R. Chawla Ors. (1980) 122 ITR 458 (Bom), wherein their Lordships expressed the opinion that the completed assessment could not be reopened u/s 17 (b) of the WT Act, 1957 merely because the departmental valuer had given a higher figure than what was the valuation as per the valuation report of an approved valuer which was originally accepted by the WTO. At the time of the original assessment the report of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ir Lordships of the Rajasthan High Court in the case of Brig. B. Lal vs. CIT (1980) 15 CTR (Raj) 180 : (1981) 127 ITR 308 (Raj). In view of this, according to the ld. counsel for the assessee, the reference to the Valuation Officers in the assessee's own cases was not possible and no reopening with reference to the Valuation Officer's report could, in the normal course, have been made. It would, therefore, be a sheer travesty of law if it was contended or held that the assessee's completed assessments for the years under consideration could be reopened on the basis of the report of the District Valuation Officer in somebody else's case. The entire base of reopening, according to the ld. counsel for the assessee was illegal and, as such, the reassessment proceedings were rightly quashed by the ld. AAC. Our attention has also been invited by the ld. counsel to the various decisions of the IT Tribunel: (I) M.R. Anjaria vs. CWT 3 Taxman 528 (Bom) (ii) WTO vs. S.P.C. Murthy 7 Taxman 156 (Bang) (iii) WTO vs. Dr. A. Khadia (1981) Tax 60 (6)-75. 11. (a) We have carefully examined the rival submissions and the facts on record. Before we deal with the various issues of law raised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he opinion for the reasons to be shortly given that the reopening was justified on facts. It is true that the information, on the basis of which the WTO in the present cases acted, came to him from the WTO, M Ward, Comp, Dist II, Calcutta, but the information, which shaped the formation of the ITO's belief was not as to what opinion the said ITO had formulated with regard to the half share of the co-owner, Sri A.K. Kothari, but the opinion of the District Valuation Officer with regard to the valuation of the property No. 6B, Penn Road, Calcutta. The act of communication of the opinion of the District Valuation Officer in the case of the aforementioned property was not the same thing as the opinion of an Officer of coordinate jurisdiction, referred to in (1974) 97 ITR 210 (Cal). Intimation of information is not the same thing as the expression of an opinion and, therefore, the ratio of decision of the Hon'ble Calcutta High Court in the case of Panama Private Ltd. (1974) 97 ITR 210 (Cal) does not apply to the facts of the present cases. (ii) We are also not impressed by the assessee's argument that the reference u/s 16A to the District Valuation Officer made in the case of Sri A.K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard is not acceptable to us. We see no travesty of law when the facts are put in the above perceptive. It the Deptl. valuer's report could be the source of information, the WTO, in the present cases, did have "information" as to the value of the property owned by the assessee, and this information did come to his possession after the original assessments had been completed, and the reopening in that case would be valid. 14. Let us, therefore, examine if the report of the District Valuation Officers could be the source of "information" on the basis of which the WTO could form his belief as to the escapement of wealth. In Sakarlal Balabhai (1975) 100 ITR 97 (Guj), their Lordships of the Hon'ble Gujarat High Court have unequivocally stated that such report would be a valid source of the information. Their Lordships of the Hon'ble Calcutta High Court have also supported the above view, as would be clear from the observations made by their Lordships at page 453 of (1979) 118 ITR (Cal) in the case of Ganga Properties extracted by us in para 7(d). The ld. counsel for the assessee had suggested that the above view was in the nature of obiter dicta and was not necessary for deciding t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17(b) for the asst. yr. 1975-76 is not, in our opinion, sustainable in law. It is in our opinion, directly caught in the mischief of the ratio of the decision in Tulsidas Kilachand's case (1980) 122 ITR 458. In this year, as we have noted above, the valuation of the property was revised by the assessee herself to Rs.4,22,000 (from Rs.2,81,720 in the immediately preceding assessment year) on the basis of the report of valuation given by an approved valuer. This report was examined in detail by the WTO as he points out in his original assessment order. On the same set of facts, the Govt. valuer has given a different opinion. Acting on it would amount to nothing but change of opinion on the same material. It is not permissible in law. If this change of opinion had been on the basis of "information" received subsequent to assessment, it would not have come in the way of reopening the assessment as explained by their Lordships of the Hon'ble Calcutta High court in (1979) 119 ITR 785 (Cal) at p. 797, extracted by us at page 7 supra (in para 7(b). Respectfully following the ratio of the above division, we quash the initiation of proceedings for the asst. yr. 1975-76, just as, on different ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the co-owner and, as such, there was no occasion to give an opportunity of hearing to the said valuer. The other contentions of the revenue were also according to him, frivolous for, there was no set formula for writing an appellate order and if after stating the view point of the assessee, the ld. AAC was in agreement with it and he could end by saying that he accepted the above contentions of the assessee. In such a situation the contentions of the assessee would be those of the AAC. So far as the material was concerned, it was not for the ld. AAC to make detailed enquiries at his level and to place on record material. It was for the revenue to place on record material and the ld, AAC could only examine it. It was not that the ld. AAC had not examined the report of the Valuation Officer, he had rejected it after examining the same on merits. 19. The ld. counsel for the assessee objected to the Deptl. Rep.'s pleadings for the acceptance of the valuation report of the valuer, because, according to him, these pleadings did not arise out of any ground of appeal taken by the department. The grievance of the department, as set out in the grounds of appeal, was not that the valuati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the assessee's own case, and it would not be enough if the said report is made in somebody else's case. Sec. 16A is a complete code in itself and before a Valuation Officer can express his opinion with regard to the valuation, he is under a duty to hear the objections of the assessee. A reference u/s 16A in each individual case is, therefore, necessary in case the provisions of sub-s (3A) of s.23 are to be made applicable. In the present case, the reference u/s 16A was not made to the VO by the WTO and, therefore, there was no occasion for the AAC to have given statutory opportunity of hearing to the said valuer. Under clause (g) of sub-s (3A) of s. 23 there is a provision for the WTO to make a request to the AAC that the Valuation Officer be heard. The WTO made no such request before the AAC. The AAC was, therefore, in our opinion, not obliged to give an opportunity of hearing to the Valuation Officer. No irregularity therefore, appears to us to have been committed by the ld. AAC in hearing this appeal. The additional ground moved by the revenue is, in the circumstances, hereby rejected. 22. (i) We also reject the contention of the revenue that the order of the ld. AAC was n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve been unduly influenced by procedural technicalities. We are also not impressed with the conclusion of the Tribunal that the appeal memo was not in accordance with law. No specific formula is necessary for seeking relief at the hands of any court or Tribunal if the necessary grounds are taken in the appeal memo". The revenue, it is true, has not raised a specific ground in the original memo of appeal on the above subject, but, during the course of argument before us, the ld. Deptl. Rep. did say that he wanted to raise this ground of appeal and in as much as this is the Kernel of the controversy, it appears to us that we would be failing in our duty if we refuse to the department the necessary permission. Rule 11 of the Income-tax Tribunal Rules, 1963 does give to the Tribunal the right to grant leave to the appellant to urge in support of any ground not set forth in the memo of appeal. The only requirement of the said rule is that, before such leave is granted the opposite side should be heard. The ld. Counsel for the assessee has already been heard in the matter and, therefore, we admit this additional plea of the revenue and proceed to dispose it of. It is common ground that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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